1. Suppose you win the Publishers Clearinghouse $10 million sweepstakes. You can either receive $8 million immediately or receive equal annual installments of $333,333.33 over 30 years. Which of the following is correct? (Ignore taxes)
*You cannot choose between the two without first calculating future values.
*You will always choose the lump regardless of interest rates.
*You will choose the annuity payment if the interest rate is 1%.
*You will always choose the annuity
2. Imprudential inc has an unfunded pension liability of $753 million that must be paid in 15 years. to assess the value of the firms stock, financial analysts want to discount this liability back to the present. if the relevant discount rate is 7 % what is the present value of this liability? round to nearest 2 decimal places
present value: $ _________